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I always ignore the extortion (not blackmail, it is extortion) and take my lumps. I vaguely recall sometimes nothing ever happens, although it is annoying when it does. The only time I would consider paying is if the industry is critical for a tight challenge. I don't have an impression that paying encourages them or that not paying discourages them.
This is one system that could be improved (or ... removed?) in RE2. If it is improved, I would think lower costs and shorter consequences but (slightly) more frequent events would be the way to go, with a dynamic system that changes with behavior ... and personality to keep it from being too simple to "always" to the right thing.
A complicating issue is that you have no idea _where_ the affected business will be.
Another issue is that if you choose to NOT pay the extortion, you are never notified as to WHICH business got attacked. At least when the Saboteur attacks an Industry or Terminal, the program is kind enough to place a Fire icon on the affected city.